An Econometric Analysis of the Dairy Cattle Improvement

PThis paper focuses upon the dairy cattle improvment at dairy farms as biological and chemical technical change after the Second World War. We evaluated dairy cattle improvment which raised the profitability of dairy farms, by searching out its features and the economic interpretations. Because dairy cattle have characteristics of input and an output, this leads to double effects at milk production and on the dairy cattle market. In this paper the double effects are clarified. This paper evaluates three points : (1) dairy cattle improvment operations. (2) the effect on milk producton input, (3) the effect on dairy cattle market for output. First, we must grasp the feature of dairy cattle improvment operations and clarify the factors for providing that feature. Chapter 2 presents an overview of processes of change in public institutions in relation to dairy cattle improvment operations. The diffusion of artificial insemination with progency test projects and imported semen, has expanded the choice of AI-bulls, and laid the foundaion for dairy cattle improvment operations at dairy farms. The diffusion of information on herd performance tests has helped dairy cattle improvment. But utilization of the information has widened the gap in dairy cattle improvment operations btween the dairy farms. Here we found institute induced technical change. This means the institute induces technical change and vice versa. As the demand for improvment operations information does not decrease, the institute for diffusing low-cost improvment operations and high technology plays an improtant role. Next, in chapter 3, the main operations of dairy cattle improvment at dairy farms is the selection of AI-bulls and cows. The features and economic significance of these operations are explained by a questionnaire to dairy firms at Taiki-town concerning the average milk prodcts. The criterion for the selection of AI-bulls, cows and mother cows is to produce quantitatively and qualitatively, raising the profitability. The investment for getting the information and a high semen price, and for the selection of mother cows produces the same effect. As type is also considered for raising performance, dairy cattle improvment is operated not only for input but also for output on cows. The improvment of type is operated not so much for getting future profit as for getting livestok sold. Because the improvment of bulls over cows for breeding performance can raise productivity of all dairy firms, positive improvment is needed. On the other hand, the improvment of cows of lower breeding performance than bulls can bring about incomes which are economically interpreted as returning to personal incomes. The selection of cows with greater performance is needed. As economic significance is founded upon improvment from cows, and more details are exammied in chapter 4. In this chapter, the cow's durable year is cited to explain its ability, milk production operations of dairy farms, and utilization of information. Survival analyses are employed for culled cows in Shouwa 63. The results show : (1) more milk and fat% yeild per cow and a shorter milking period per milking interval for cows not to be easily culled ; (2) utilization of information on herd performance test is used for judgement on the selecion of cows ; (3) dairy farms are larger and higher in average milk produts, for cows not easliy to be culled. But, whether information on the number of somatic viruses is fully used dominates productvity. Here we found the characteristics of cows which ought to be used for input and the factors for selection in dairy farms. The second point is attempted in Chapter 5 by evaluating dairy cattle input on the development of milk production and productivity. In this chapter, translog cost functions were employed to trace productivity deveopment to scale economic and technical change and estimate a bias of technical change. The results show that technical change contributed more to productivity development in the milking sector, and dairy cattle input was a main factor of technical change. Purchased feed was substituted for self-supplied feed to raise the performance of dairy cattle input In is shown that utilization of higher performance dairy cattle obtained by dairy cattle improvment advances productivity. Also, the second point is attempted in Chapter 6. In this chapter, the milk production structure of dairy farms on which average milk products increased were understood and the characteristics of dairy cattle input on these farms were considered. Here we estimate the efficiencies of milk production on dairy farms at which average milk prduct continuously increased for four years. A source of inefficiencies was over-cost in feed production caused by fixed investment. Dairy farms which increase average milk products using mainly self-supplied feed indicate inefficiencies. On the one hand, dairy farms which used mainly purchased feed and higher performance dairy cattle indicate efficiencies. These suggest that dairy cattle improvment is important to avoid over-cost caused by fixed investment and to improve efficiency. The third point is attempted in Chapter 7. Price formation of pregnant heifers is examined by employing market transacted price data in the Hayakita cow market from Shoua 61 to Heisei 1. Now we employ Hayashi 1. To begin with, traffic criterion between dairy farms is examined by a questionnaire at Taiki-town. The result indicated that the most important criterion is milk yield. The contents and ordering of importance of the criterion is the same for selling and for buying. Next, from an analysis for market-transacted price data, price formation is influenced by breeding. This means that the result of dairy cattle improvment is evaluated by a cow transacted price. We suggest that dairy cattle improvment make possible the selling of cows at a high price and increasing milk productivity. This suggests a double effect in dairy cattle improvment. The results gained from the previous chapters proved the double effect of dairy cattle improvment. A part of the dairy cattle input in milk production mainly increases productivity through decreasing the average cost. Efficiently increasing the average milk products is possible through high performance dairy cattle for milk production using manily purchased feed. These are the effects on input of milk producton. On the one hand, income from improvment of cows induces the demand for improved cows on the other dairy farms. The result of dairy cattle improvment is evaluated by a cow transacted price. So, the income transfer occurs, and the seller can recover lost income according to cow price. This is the effect on output in the dairy cattle market. It goes without saying that a double effect on dairy cattle improvement increases the profitability of dairy farms. To summarise, three remarks are necessary. First, double effect on dairy cattle improvment increases profitability of dairy farms. To realize more profitability, positive R&D behavior is needed in dairy farms under the present system, and they must adapt milk production operations. Because the selection of AI-bulls raises productivity of all dairy farms and the selection of cows for improvment brings about incomes which are economically interpreted as returning to personal incomes. Secondly, because dairy cattle improvment is biological and chemical technical change based on natural power (breeding), the cost of improvment operations is little. Most cost and risk is payed for by experiment and research organizations. Accordingly, the place and guidance of R&D on dairy farms needs to be offered by institutions which will diffuse improvment operations, in some cases corresponding to new high technology. Finally, the weight of revenue from livestock sold as more important on profitability in recent years has caused the cow market to fill the roll of escaping from bottle-necks in the milk market because of the existence of a desire for more revenue from dairy cattle improvment. If experiment and research organizations are invested in for agricltural policy and there are bottle-necks in the milk market, the return from investment is small. To development of agriculture by means of technical change, the relation of output-input, market, and technical change ought to be considered.departmental bulletin pape